Kara Sears
The Trump Foundation was a New York-based private foundation formed in 1988 by Donald Trump and dissolved by court order in 2018. The foundation was created to receive royalties from Trump's book, 'Trump: The Art of the Deal', and donations from others, for the stated purpose of distributing the funds to charitable causes. However, the foundation came under scrutiny during the 2016 presidential election campaign, with investigators discovering various ethical and legal violations, including failure to register in New York, self-dealing, and illegal campaign contributions. In 2018, New York Attorney General Barbara Underwood filed a civil suit against the foundation, Trump himself, and his adult children, alleging a “shocking pattern of illegality” and seeking $2.8 million in restitution. As a result, the foundation agreed to shut down and distribute its remaining assets to court-approved charities, with Trump also being forced to pay $2 million in damages for misusing charitable funds for political gain.
| Characteristics | Values |
|---|---|
| Reason for shutdown | Misuse of funds, including unlawful coordination with the Trump presidential campaign, repeated and willful self-dealing, and failure to register in New York |
| Year of shutdown | 2018 |
| Amount paid in damages | $2 million |
| Number of charities receiving damages | 8 |
| Charities receiving damages | Army Emergency Relief, the Children's Aid Society, Citymeals-on-Wheels, Give an Hour, Martha's Table, the United Negro College Fund, the United Way of National Capital Area, and the U.S. Holocaust Memorial Museum |
| Additional reimbursement | $11,525 for sports paraphernalia and champagne purchased at a charity gala |
| Total amount paid to charities | $1,809,123.30 |
| Amount received by each charity | $476,140.41 |
| Admittance of guilt | Yes |
| Additional penalties | Trump and his children are banned from serving on the board of any other New York-based non-profit |
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What You'll Learn
Unlawful coordination with the Trump presidential campaign
The Trump Foundation was accused of unlawful coordination with the Trump presidential campaign, which was revealed to be a part of a "shocking pattern of illegality" by New York Attorney General Barbara Underwood. The foundation was used to advance Trump's campaign by raising money at a televised fundraiser in January 2016, allowing campaign staff to decide how the money was spent. This was in violation of rules barring charities from engaging in political activity.
Trump's campaign manager at the time, Corey Lewandowski, decided which groups received the funding. The foundation's grants were used to benefit the campaign, with large donation cheques being distributed at "Donald Trump for President" rallies, featuring his campaign slogan "Make America Great Again".
The New York Attorney General's office alleged that Trump had ceded control of his foundation to his campaign staff, promoting an Iowa fundraiser for veterans just before the Iowa presidential caucus. This was a strategic move to garner "expensive, vote-getting publicity" for Trump's campaign.
In addition, the foundation donated $25,000 to Florida Attorney General Pamela Bondi's election campaign while her office was reviewing fraud allegations against Trump University, a for-profit real estate program. Bondi's office later dropped the investigation without pressing charges.
The unlawful coordination between the Trump Foundation and the Trump presidential campaign was a significant aspect of the lawsuit filed by the New York Attorney General's office, which resulted in the foundation's shutdown and a $2 million settlement paid by Trump.
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Improperly settling legal disputes
The Trump Foundation was shut down after New York Attorney General Letitia James sued to dissolve the foundation and sought restitution for improperly settling legal disputes. The lawsuit alleged that the foundation was used as a personal piggy bank for Trump's businesses, legal bills, and presidential campaign.
In one case, Trump used $100,000 from the foundation to settle a dispute with the Town of Palm Beach over a flagpole at his Mar-a-Lago club. The town had fined Trump's club $120,000, but agreed to waive the fines if Trump's club donated to a specific charity for veterans. Instead of using his own money, Trump sent a check from the Trump Foundation.
In another instance, Trump National Golf Club in Westchester County, NY, agreed to contribute $158,000 to a charity of the plaintiff's choice to settle a lawsuit concerning a charity golf tournament. Again, this money came from the Trump Foundation.
These actions were deemed to be "self-dealing", which is prohibited by IRS rules. Nonprofit leaders are barred from using charity money to benefit themselves or their businesses. As a result of these violations, Trump was forced to pay $2 million in damages to eight different charities and agree to restrictions on future charitable service.
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Improperly funding political campaigns
The Trump Foundation was used to improperly fund political campaigns, which is illegal. Charities are barred from engaging in political campaigns, but the foundation held a fundraiser for veterans during the 2016 Iowa caucuses, which was designed to further Trump's political campaign. The event raised $2.8 million, which was given to veterans' organisations.
Evidence of banned coordination between the campaign officials and the foundation was found in emails exchanged with then-Trump campaign manager Corey Lewandowski. In one email, a Trump company vice president asked Lewandowski for guidance on how to distribute the money raised.
At least five $100,000 grants were made to groups in Iowa in the days before the 2016 Iowa caucuses. The lawsuit also alleged that Trump received more than $2 million at a fundraiser in Iowa, and that the money went to his foundation.
In addition to improperly funding political campaigns, the Trump Foundation was also accused of other illegal activities, including using charitable funds to pay off legal settlements and purchase a painting of Trump himself. As a result of these violations, the foundation was shut down and Trump was ordered to pay $2 million in damages to eight different charities.
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Improperly funding personal purchases
The Trump Foundation was accused of improperly funding personal purchases for Donald Trump and his family. The New York Attorney General's office filed a civil suit against the foundation, alleging that it was "little more than a checkbook for payments from Mr. Trump or his businesses to nonprofits, regardless of their purpose or legality".
The suit claimed that Trump used the foundation to pay for personal expenses, such as a $10,000 portrait of himself, sports memorabilia, and champagne at a charity gala. The foundation also allegedly funded a $250,000 renovation of a fountain outside of Trump's Plaza Hotel and paid for his son's $7 Boy Scout dues.
In addition, the foundation was accused of improperly funding Trump's political campaign, including allowing campaign staff to coordinate with the foundation to hold a fundraiser during the 2016 Iowa caucuses. The foundation also allegedly made grants to charities that rented Trump Organization facilities, with the charities paying substantial fees to the Trump Organization to host events at Trump-owned properties.
As a result of these allegations, a judge ordered Trump to pay $2 million in damages to various charities and shut down the Trump Foundation. Trump was also required to admit to 19 instances of personal misuse of funds and agree to restrictions on future charitable involvement.
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Improperly funding business purchases
The Trump Foundation was shut down in 2018 following a lawsuit filed by the New York Attorney General's office. The lawsuit alleged that the foundation was used as a "personal piggy bank" for Trump's businesses, legal bills, and presidential campaign.
The foundation was accused of improperly funding business purchases, including using charitable funds to pay off legal debts and purchase a six-foot-tall portrait of Trump himself for $20,000. The lawsuit also alleged that the foundation illegally helped support Trump's presidential campaign by raising money at a nationally televised fundraiser in January 2016 and allowing campaign staffers to dictate how the money was spent.
As a result of the lawsuit, Trump was forced to pay $2 million in damages to eight different charities and reimburse his namesake foundation for additional improper expenses, including sports paraphernalia and champagne purchased at a charity gala. The settlement also included mandatory training requirements for Trump's children, Donald Trump Jr., Ivanka Trump, and Eric Trump, and restrictions on their future charitable service.
The dissolution of the Trump Foundation and the associated penalties send a clear message that charities must follow the law and that no one is above the law, regardless of their position or power.
The closure of the Trump Foundation and the subsequent legal consequences highlight the importance of proper funding practices and the impact of misconduct in the charitable sector. It serves as a reminder that misuse of funds and improper funding practices will not be tolerated and that all organizations, including those with political affiliations, must adhere to the same set of rules and regulations.
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Frequently asked questions
Yes, the Trump Foundation was found to have engaged in various illegal activities, including unlawful coordination with the Trump presidential campaign, failure to register in New York, self-dealing, illegal campaign contributions, and improper handling of funds raised for veterans' causes.
The Trump Foundation was found to have violated multiple laws and regulations, including campaign finance laws, tax laws, and charitable organization laws.
The Trump Foundation was forced to shut down and dissolve under court supervision. Donald Trump was ordered to pay $2 million in damages and reimburse the foundation for improper expenses. Trump and his children were also banned from serving on the boards of other charitable institutions in New York.
The New York Attorney General's office, led by Barbara Underwood, played a key role in investigating and suing the Trump Foundation. Underwood's predecessor, Eric Schneiderman, initiated the investigation in 2016.
The Trump Foundation and Donald Trump denied any wrongdoing. Trump's attorneys argued that the lawsuit was politically motivated, but these claims were rejected by a judge. Trump agreed to dissolve the foundation and distribute its remaining assets to approved charities.
